Yours truly contributed a Slashdot story yesterday and it got accepted! This is the fifth story of mine that has got accepted in the last two to three years.

Now I can wear my former geekdom in my sleave! ..Just kidding!

Reductionism has driven 20th century science (and one might add, all other knowledge), with the result being that we have experts who know more and more about less and less–and while leaving us devoid of generalists and multi-disciplinary artists and scientists who can “connect the dots” across these fragmented foci.

I consider myself a curious generalist.

With a genuine interest in the world around me, seeking answers to my random questions, always acknowledging that the complete truth may never be known, that the path to the truth in itself defines the meaning of the truth, and maintaining humility, by balancing rational thought with an open mind.

Its becoming a little tad to talk about “revolution”, “paradign shift”, “next BIG thing”…….I am pretty sure the guy who invented or discovered the wheel never shouted out from mountaintops about how ‘revolutionary’ his idea is, nor did he go about holding seminars charging 60 bushnells of corn for every one hour of talk. In any case, change happens, some of which is revolutionary, others are pretty much evolutionary, bound to happen anyway. A revolutionary change is just that, revolutionary. No one anticipates it, no one recognizes it.

I chanced upon the book ‘The Witch Doctors’ this weekend.

‘The Witch Doctors’ provides a clear-thinking analysis of the wide spectrum of management theories and applications, and points to several very important limitations inherent in the modern management consultancy industry.

In particular, it exposes:

1. the unnecessary promotion of business and management ‘jargon’

2. the excessive tendency towards pursuing the latest ‘fad’

3. the reluctance to look beneath the surface of ideas or concepts, in order to analyse them critically.

Writing management books is a “business” (and a very lucrative one). In most cases the main driver for writing management books is not a contribution to the discipline of management but making tons of money, either by generating additional consulting revenue (in the case of consultancies), improving the school’s curriculum, or making someone rich by charging exorbitant fees for lectures and workshops around the world.

These gurus have made significant contributions to the discipline of management but in many occasions, their ideas have led to huge failures at corporations that blindly trusted them and tried to implement their new paradigms. Don’t take their work for granted and look for contradictory evidence in older books or articles of the same author.

Businesses around the world have benefited tremendously of management practices, old and new, but there is also overwhelming evidence that many companies around the world and notable business leaders have thrived without following the latest management fads

The book also gives a very good overview of the management trends and theories of the last few decades and their proponents. It would be nice to see an updated edition of this book covering the new generation of “gurus/e-gurus” (Goleman, Moore, etc.), as well as a new chapter on E-Business, E-Government and other emerging trends.

John Micklethwait and Adrian Wooldridge are to management fads what the little child was to the naked emperor and The Witch Doctors is their manifest. When you enter the pages of this extremely well written oeuvre you’re bascially not in Management-haven, Kansas anymore. Where management literature usually dramatizes, Micklethwait and Wooldridge present a sober view and make a point of playing down the actual impact and importance of so-called Gurus. With the stealth and graceful elegance of secret service assassins, the authors meticulously work through thinkers and movements, with chapters divided for pedagogic simplicity into chronological order. Something striking is the high correlation between the chronology and the order of importance; this could be attributed to nostalgia but is more likely a result of the fact that management “thinking” has become unscrupulously popular over the last decade, with everyone from football coaches to Roseanne Barr wanting to share their secrets of success with results that, at best, can be described as mixed. It is therefore no coincidence that the final, and most enjoyable, chapter is entitled “A walk on the wild side” – a reference to the fact that many of the people that get in on the action today bear more than a little resemblance to actual witch doctors with results as often doubtful as they are deceiving. Better then to long for yesteryear when men were men and people like Charles Handy, Michael Porter and, the Godfather of management thinkers, Peter Drucker roamed free. But even in the chapters describing these earlier movements, Micklethwait and Wooldridge employ the dry, sarcastic wit that is so intimately associated with their mother magazine, The Economist. It is not that they’re so much angry or accusatory as genuinely professional journalists and in era when the borders between the editorial and the commercial interests are constantly blurred, this is the least one could ask for.

You may be one of those people who prefer to immerse yourself in an experience, such as watching the parade of a naked emperor or gawking at a “truly amazing behind-the-scenes look at a new movie” which is often what management seminars are all about from a metaphorical perspective. But if you don’t mind, or perhaps even prefer, a tell-it-like-it-is perspective even though it may ruin your temporary immersion in something, The Witch Doctors is a rare gem. Why not test yourself; are you a channel 7-action news kind of a person or someone who takes the time to read through a daily newspaper? Do you see management seminars as a source of knowledge or as one of entertainment? And finally, do you prefer to look away when you catch an accidental glance at Mickey Mouse stripping off his costume at Disneyland to keep the illusion real or do you revel in the fact that Disneyworld is just one more commercial attraction like many others and one that, in purpose, is no different from the K-Mart down the street? If you preferred the former in each of these questions, congratulations to you and the management literature industry since Amazon and its competitors will always have rows of titles uncovering corporate “secrets”, seven “brilliant” thoughts on nothing in particular and countless case studies about companies you’ve never heard of or will never have much in common with. If you, on the other hand, preferred the latter, The Witch Doctors is a valuable and helpful delight to read. Trivializing -sure, but not if you compare it to the way that three centuries of literature is compressed into vulgar travesties like “Chicken Soup for the faint-hearted” in this day and age.

According to a recent Reuters article, scientists have been able to cause monkeys to stop procrastinating by blocking the development of a dopamine receptor in the brain. The net result- the monkeys turned into workaholics. An article has appeared in the online version of Nature. Apparently, monkeys, just like human beings, tend to slack off on tasks until the very last minute. They become quite adept at judging how long they have till they absolutely must complete these tasks. The original article appears in the Proceedings of the National Academy of Sciences of the United States of America. An additional blurb appears here courtesty of Science Blog.” NIH has a press release.

Eleven hours of developing financial models to predict risk behavior in consumer finance industry, one hour of aerobics burning 750 calories, one hour of pumping iron, and a total of an hour and a half navigating Washington DC’s Beltway traffic sums up my active day today!

There are different approaches to timing entry into a stock.

Technical analysis [stockcharts.com] assumes that all information about a stock is factored into the price. Indicators based on prior price history are used to determine trend. Proponents of the method say the price movement is a manifestation of crowd behavior.

Fundamental analysts [thestreet.com] study the companies financials, such as trends in earnings, price to sales ratio, profit margin, return on equity, etc.

Another approach [thetechinvestor.com] is to find companies that are likely to profit from long term major trends in technology and/or society.

The Iowa Electronic Markets have created two markets where traders may buy and sell contracts based on beliefs of Google’s market cap at the end of the first day of public trading. The first market, GOOGLE_LIN, trades contracts with liquidation values linearly dependent on the market cap. The second, GOOGLE_WTA, trades six unique and exhaustive contracts in a winner-takes-all market. The markets are currently suggesting a market cap around $30-35 billion. The IEM is also popular for its political markets, which have been very successful (more accurate than polls) at predicting political elections

EE Times has a fascinating article on how electronics companies are being sucked into a profitless spiral by the cell phone market. More and more of the small consumer gadgets are being folded into the phone: camera, music player, PDA, GPS, etc. So the market for non-phone gadgets is slowly going away as the phone picks up more functions. However, consumers don’t buy most phones; they are given away (or sold very cheap) by the service providers as hooks to get people to sign up for mobile service. So the service providers are demanding (and getting) rock-bottom prices for fancy phones they can give away, and the micro chip companies are forced into brutal competition for a market that is shrinking into a single commodity gadget, the phone.

Time for another paper on the problem of consciousness! This new one by Murat Aydede and Güven Güzeldere has the impressive title, Cognitive Architecture, Concepts, and Introspection: An Information-Theoretic Solution to the Problem of Phenomenal Consciousness (PDF format). It goes over a lot of the problems and disagreements that persist among philosophers and scientists about consciousness, and then proposes a new theory. Their idea, which should be good news for anyone working on intelligent machines, is basically that good old-fashioned information theory contains everything that’s needed to explain phenomenal consciousness. Along the way, they talk about introspection, daydreaming, phenomenal zombies, vertical versus horizontal information processing, and other fun stuff. The 65 page article includes loads of lengthy footnotes referencing just about every modern philosopher who has philosophised about consciousness, from Dennett to Searle (with cameo appearances from Descartes and Locke).

Kneeling among some jasmine blossoms, a 17th-Century Indian poet strokes his beard as he reflects on the verses he’s just read out aloud to himself, clasping the preciously bound book in his left hand. Standing next to a row of roughly hewn wooden shelves, a Korean monk pulls out one of many wooden tablets of the Seventh Century Tripitaka Koreana and holds it in front of him, reading it with silent attention. Drawing on his acting talents, Charles Dickens holds up a copy of one of his own novels, from which to read to an adoring public. Leaning on a stone parapet overlooking the Seine, a young man loses himself in a book held open in front of him. In these portraits and pictures, viewed by me over time, I see readers, and in their gestures the pleasure, responsibility and power that they derive from reading, that are common with mine. I am not alone.

In my adolescence, whenever people mentioned my so-called passion for reading, I would always start to bristle. After all, to be known as a book lover — how grotesque. To my hypersensitive ears, it was like being called a eunuch or an old maid; one always hears that faint sneer of disdain and condescension mixed with pity. To be bookish is to be mousy, repressed, a shy wallflower, incapable of getting along with people, dreamy and poetic, helpless in the real world.

Shocking as it may seem, my real “love” isn’t so much for reading as for pleasure — it merely happens that learning new things delights me, as do fast-paced stories, imaginative wordplay, and distinctive prose styles. Should I be congratulated for being a self-indulgent hedonist? I certainly wouldn’t read books if they were boring, irrelevant and soporific — which is how most high school kids regard the classics of world literature. No, I read for excitement. Everything else is secondary.

A life-time habit

I first discovered that I could read at the approximate age of four. My father was largely responsible for this and in a tireless gesture of patience (for which I am eternally grateful to him) he would read to me from my favourite illustrated comic book. The Amar Chitra Katha was to me an endless source of entertainment. A popular comic book series, it deals with figures from Indian history and mythology, brilliantly illustrated performing acts that ranged from heroism to comedy. I liked my father to read fast, which he did, almost whizzing through pages of pictures that I had seen over and over again and the letters that I knew (because I had been told) were the names of the pictures, under which they sat. Yet, if he did miss a section or a dialogue, I would be quick to remind him of his slip. As my father explained the moving, talking images, I now knew (every time the pages opened to the now familiar pictures) what the shapes beneath them meant. There was pleasure in this, but it wore thin as eventually there was no surprise.

Then one day, from the window of our car during one of our many trips to visit my aunt in Mumbai’s Malabar Hill (my early childhood being spent there), I saw a billboard by the side of the road. The sight could not have lasted very long; the car stopped for a moment, just long enough for me to see, large and looming shapes similar to those in my book, but shapes that I had never seen before. And yet, all of a sudden, I knew what they were; I heard them in my head, they metamorphosed from black lines and white spaces into a solid, sonorous, meaningful reality. I had done this all by myself. Since I could turn bare lines into living reality, I was all-powerful. I could read. What that word was on that long-past illustrated billboard I no longer know, the impression of suddenly being able to comprehend what before I could only gaze at is as vivid today as it must have been then. It was like acquiring an entirely new sense, so that certain things no longer consisted merely of what my eyes could see, my fingers could feel or my tongue could taste, but of what my whole body could decipher, translate, give voice to, read.

The family of book readers that I was unknowingly entering (we always think that we are alone in each discovery, and that every experience, from death to birth, is terrifyingly unique), extend or concentrate a function that is common to us all. Reading letters on a page is only one of its many guises. The astronomer reading a map of stars that no longer exist; an architect reading the land on which a house is to be built, the weaver reading the intricate design of a carpet being woven, the dancer reading the choreographic notations, the public reading the dancer’s movements on the stage, the farmer reading the weather in the sky — all these share with book readers the craft of deciphering and translating signs. And yet, in every case, it is the reader who reads the sense; it is the reader who must attribute meaning to a system of signs and then decipher it.

The community of words

We all read ourselves and the world around us in order to glimpse what and where we are. We read to understand, or to begin to understand. Reading, almost as much as breathing, is our essential function. I didn’t learn to write until later, until I was six. I could perhaps live without writing, but I don’t think I could live without reading. Experience came to me first through books and my reading life gave me the same impression of flowing against the current, living out what I had read.

“To write down one’s impression of `Hamlet’ as one reads it year after year,” wrote Virginia Woolf, “would be virtually to record one’s own autobiography, for as we know more of life, so Shakespeare comments upon what we know.” For me it was somewhat different. If books were autobiographies then they were so before the event and I recognised later happenings from what I had read earlier in Pablo Neruda, Marquez, Naipaul and R.K. Narayan. Like Plato, it seemed that I passed from knowledge to its subject. I found more reality in the idea than in the thing because it was given to me first and because it was given as a thing. It was in books that I encountered the universe: digested, classified, labelled and still formidable.

Reading gave me an excuse for privacy, my bed late at night became my safest and most secluded place for reading, in that nebulous region between being awake and being asleep. Many nights I would turn on my bedside lamp and try both to reach the end of the book I was reading, and to delay the end as much as possible, going back a few pages, looking for a section I had enjoyed, checking details I thought had escaped me. In fact, I don’t ever remember feeling lonely, my books were good company. The psychologist James Hillman argues that those who have read stories or had stories read to them in childhood “are in better shape or have a better prognosis than those to whom story must be introduced… Coming early with life it is already a perspective on life.”

Worlds waiting

I never talked to anyone about my reading; the need to share came afterwards. Each book was a world unto itself, and in it I took refuge. Though I knew myself incapable of making up stories such as my favourite authors wrote, I felt that my opinions frequently coincided with theirs, and (to use Montaigne’s phrase) “I took to trailing far behind them murmuring `Hear, Hear’.” Later I was able to dissociate myself from their fiction; but in my childhood and much of my adolescence, most of what the book told me, however fantastical, was true at the time of my reading, and as tangible as the stuff of which the book itself was made. The world that revealed itself in the book and the book itself were never, at any price, to be divided. The contents of every book burned within it, blazed from it; located not merely in its binding or its pictures, they were enshrined in chapter headings and opening letters, paragraphs and lines. You did not read books through; you dwelt, abided between their lines and reopening them after an interval, surprised yourself at the spot where you halted.

I think I read in at least two ways. First, by following breathlessly, the events and the characters without stopping to notice the details, the quickening pace of reading sometimes hurtling the story beyond the last page — as when I read Vonnegut, Maugham, O’Henry or Salinger. Secondly, by careful exploration, scrutinising the text to understand its ravelled meaning, finding pleasure in merely the sound of the words or the clues, which the words did not wish to reveal, or which I suspected was hidden deep in the story itself, something too terrible or too marvellous to be looked at. The second kind of reading — which had something of the quality of reading stories — I discovered in Lewis Carroll, Vikram Seth, Vassanji, Tagore and Nabokov.

Reading, to me, set one free, it gave one a freedom to explore thoughts and the world outside the context they lived in. This has its retributions in the political world we live in, from the banning of writers like Rushdie and Taslima Nasreen to the censorship of countless authors ranging from Neruda to Gorky over the years. But not only totalitarian governments fear reading. Readers are bullied in school yards and in colleges as much as in government offices and prisons.

Almost everywhere the community of readers has an ambiguous reputation that comes from its acquired authority and perceived power. Something in the relationship between a reader and a book is recognised as wise and fruitful, but is also seen as disdainfully exclusive and excluding, perhaps because the image of an individual curled up in a corner, seemingly oblivious of the grumblings of the world, suggests impenetrable privacy and a selfish eye along with a singular secretive action. “Books, you have too many books!” my mother would exclaim in frustration. I remember being called a dreamer once by a maternal uncle when he saw me reading, as if my silent activity contradicted their sense of what it meant to be productive or alive.

Reading as subversion

The popular fear of what a reader might do among the pages of a book is as ageless a fear as men have of what witches and alchemists do behind locked doors. The recent attack by vandals at the Bhandarkar Institute in Maharashtra, is yet another example of destruction of information, of books that demonstrators have no idea about in terms of value and content. Their pillaging convinced no one. Thus reality — harsh necessary reality — was seen to conflict irredeemably with the evasive dream world of books. Demotic regimes demand that we forget, and therefore they brand books as superfluous luxuries; totalitarian regimes demand that we not think, and therefore they ban and threaten and censor; both, by and large, require that we become stupid and that we accept our degradation meekly, and therefore they encourage the consumption of pap. In such circumstances, readers cannot but be subversive.

Told that we are threatened with extinction, we, today’s readers, have yet to learn what reading is. Like the act of reading itself, the history of reading jumps forward to our time — to me, to my experience as a reader — and then goes back to an early page in a distant foreign century. It skips chapters, browses, selects, re-reads, refuses to follow conventional order. Paradoxically, the fear that opposes reading to active life, that urged my mother to request me from collecting way too many books that might not amount to much, recognises a solemn truth: “You cannot embark on life, that one-off coach ride, once again when it is over,” writes the Turkish novelist Orhan Pamuk in The White Castle, “but if you have a book in your hand, no matter how complex or difficult to understand the book may be, when you have finished it, you can, if you wish, go back to the beginning, read it again, and thus understand that which is difficult and , with it, understand life as well.”

Litera scripta manet. Time to write a book.

In a letter penned in 1676, Isaac Newton famously wrote, “If I have seen further it is by standing on the shoulders of Giants.� Although it is debatable whether Newton was being modest or making a barbed comment towards his correspondent (a competitor of short stature) the phrase epitomises views of how science progresses—with the speedy and open publishing of discoveries so that others may make use of them to push back the frontiers of human understanding.

For centuries, printed journals destined for university libraries have been the focus of this publishing activity. The winds of change, though, are sweeping through these quiet and dusty corridors. Because of the internet, cost and distance are no longer barriers to providing the results of research to more than just a restricted and privileged few. This is leading people to ask why those results are not, in fact, freely available to all.

An impressive industry has built itself around the dissemination of academic research—particularly scientific work. There are over 2,000 publishers in what is called STM (scientific, technological and medical) publishing alone. Together, they publish 1.2m articles a year in about 16,000 periodical journals. It is a huge success. Not everyone, though, is entirely satisfied. Academics, universities and governments are worried that publishers have grown a little too fat and happy.

The problem is one of monopoly. Of course, publishing itself is an industry with few barriers to entry. That is not the issue. But certain journals are able to capture a lion’s share of the important papers because researchers want their papers published in the most prestigious ones. Some titles have acquired exceptional cachet over the years. Such is their prestige that a researcher can win tenure, promotion or a research grant on the basis of a single article in the right publication.

That means the publishers of those journals have the pick of the best papers, reinforcing their reputations in a positive feedback loop. They also claim copyright over what they publish, reinforcing their monopoly. So if you want to read an important paper (or an unimportant one for that matter) you have no legal choice but to pay the publisher for it.

The upshot is that university libraries must purchase the leading titles, almost whatever their price, and often at the expense of carrying less-exalted works. Owning a prestigious journal has thus become a lucrative business, which many people believe is being abused.

Cornell University, for example, recently reviewed its policies on journal acquisition. In the course of that review it noted that between 1986 and 2001 the library budget at its main campus in Ithaca, New York, increased by 149%. The number of periodicals purchased, however, grew by only 5%.

Governments, whose funds ultimately pay for a lot of the journals on the shelves of university libraries, are noticing too. A report published in July by Britain’s House of Commons Science and Technology Committee found that the average price of an academic journal in Britain rose by 58% between 1998 and 2003, while the retail price index rose by 11% in that period, and scientific output rose by 20%. The report added that profits in the industry were exceptional, singling out Reed Elsevier, a British publisher whose Dutch subsidiary, Elsevier, is the market leader in STM publishing, for having profits “as much as 34% at the operating levelâ€�.

Indeed, Elsevier has attracted criticism from a number of quarters. Cornell’s reviewers, for example, observed that in the previous decade Elsevier’s annual price increases on its titles had often been over 10%—and occasionally over 20%.

Arie Jongejan, CEO of Elsevier’s science and technology division, defends his firm’s profits, pointing out that after tax and depreciation, last year’s profit margins were 17%, not as high as some claim. But that is still a hefty whack. He justifies such margins on the grounds that the firm’s journals are publishing more papers each year and also because high profitability is necessary in order to ensure the sustainability of those journals.

But the dominance of Elsevier and its kin is under attack. The House of Commons Science and Technology Committee did more than just lament the rising price of journals. It told the British government that the country’s universities should be required to ensure that all their research papers are available free online, and that government-funded research grants ought to include free access to the findings a condition of the awards. The government will respond next month.

American politicians, too, are getting cross. Earlier this month the House of Representatives’ Committee on Appropriations approved a provision in a bill that backs open access to material published by the National Institutes of Health (NIH). The committee expressed concern at the lack of public access to research findings, and at the rising price of journals. These, it commented, were “contrary to the best interests of the US taxpayers who paid for this researchâ€�.

If the Senate approves the recommendation, it will become law and the NIH will be required to deposit research funded by the agency into an online government archive called PubMed Central within six months of publication in any journal. If this happens, it will be significant, since NIH-funded work amounts to 50,000 papers a year.

Even mainland Europe is getting in on the act. In October 2003, the leading research associations of Germany, France and Switzerland signed what has become known as the “Berlin Declarationâ€�—another call for free access to research findings. One of the groups behind the declaration, Germany’s Max Planck Society, is now changing its employment contracts to require staff to return the copyright of their work to the society. At the moment it gets assigned to the publishers. Although the society’s researchers will still be able to publish in journals, their work must eventually be put into an online repository.

In response to the Berlin Declaration, the European Commission has begun a study of the scientific-publishing market—looking at price, access to published papers, and copyright. Because 41% of scientific papers originate in Europe (compared with 31% in America), the results of this study could have a big effect on the publishing industry.

One way of addressing the concerns of politicians and university libraries is the promotion of journals in which the author pays to be published. Many new online journals are attempting to do this, using electronic publication to cut their costs. The results are then made available free to readers.

BioMed Central, based in Britain, is one such publisher. The company, which was established in 1999, has not yet broken even. But Deborah Cockerill, the firm’s assistant publisher, says it is likely to do so soon, as it is growing fast. The number of articles it publishes has doubled every year. In America, a not-for-profit organisation called the Public Library of Science is employing a similar business model.

Another possibility is to generalise the House of Representatives’ proposal for American medical research and allow the traditional journals a limited period of monopoly—say six months—after which they have to make all taxpayer-funded content available free online.

Understandably, the traditional publishers are not too happy about these ideas, although some of them are moving pre-emptively towards the free-after-six-months model of the future. Barbara Meredith, vice-president of professional and scholarly publishing at the Association of American Publishers, a trade group, has said that a demand for open access to research findings could undermine the sustainability of the publishing industry, and has promised to lobby vigorously against this happening.

At the moment, the entire open access literature is tiny—less than 1% of what is published according to the Public Library of Science. But if governments were to insist that the results of research they fund must be published in an open-access way, that would change completely. The days of huge profits would then be numbered. Prestige has its uses—and the open-access journals will, no doubt, establish a pecking-order among themselves fairly quickly. But for prestige at any price, time is probably up.

From Wired:

Marine scientists conducting the first comprehensive deep-sea probes of the Mid-Atlantic Ridge stepped ashore in Bergen, Norway, this week, excited by their discovery of several suspected new species and a baffling mystery creature.

Brightly colored, about a foot long with a well-defined forepaw and tail, it looks like no known sea creature, said Olav Rune Godoe of the Institute of Marine Research in Bergen. The unknown animal was found crawling around the bottom at a depth of 6,500 feet.

Efforts to bring it to the surface failed, making it impossible to know what exactly scientists saw and photographed.

The two-month, Norwegian-led international expedition studied marine life ecosystems in the Mid-Atlantic Ridge, a chain of undersea mountains running between Iceland and the Azores. The expedition was part of a 10-year, $1 billion Census of Marine Life and involved scientists from 16 countries, including the United States and Canada.

Although the unknown animal is “kind of a sensation,” Godoe said in an interview, finding new and strange creatures wasn’t surprising given that researchers collected more than 80,000 specimens. Moreover, little is known about the deep ocean. “It’s much easier to observe the surface of the moon or Mars,” said Godoe.

One of the least explored areas on the planet, the Mid-Atlantic Ridge astonished scientists by being more like a coral reef than a desert. “We were surprised by the colors, the hard and soft corals, and diversity of fish and other species,” Godoe said.

Nearly 300 species of fish were identified, ranging in size from a fraction of an inch to 14 feet. The catch included two specimens of Aphyonus gelatinosus, a bottom-dwelling, semitransparent fish covered in a gelatinous layer that has been recorded only once before in the North Atlantic. Scientists also bagged a deep-sea fish that employs a dangling lure to attract its victims. The fish will likely be identified as a new species after full studies are completed.

Of the 50 species of squid captured, at least one has never been seen before.

The expedition used a specially outfitted, Norwegian-built vessel that employed sophisticated echo-sounding equipment. A trawling vessel, remotely operated underwater robots with video cameras, and a manned submersible also were used to collect and photograph life in the water column surrounding the ridge.

“I’m wildly excited about the results of the expedition,” said Ron O’Dor, chief scientist for the census and a biology professor at Dalhousie University in Halifax, Canada. One of the prime reasons for the census is to establish a base line of knowledge of what’s in the world’s oceans before the populations are significantly changed by overfishing and global warming.

The new echo-sounding technology worked perfectly, enabling scientists to identify what was alive in the deep water and where, said O’Dor. That made it easy for the deep-trawling vessel and underwater robots to follow behind and gather samples.

Although a brief U.S.-Russia expedition employing a submersible in the same region last year found it was far from barren, this cruise has proved the area to be very highly biologically productive and diverse, even in the deepest spots.

The echo sounders also revealed strange rings of planktonic organisms, stretching from the surface to 3,000 feet deep and extending for up to 30 nautical miles, said Godoe. It’s the first observation of such a phenomenon — which was likely created by the undersea topography and water flow — on a large scale.

Yet another new deep-sea mystery uncovered during the expedition: perfectly straight, evenly spaced lines of 2-inch-wide holes “stitched” into the bottom of the seabed at 6,000 feet. The holes may be burrows of some crab or lobster, but the wonder is how any creature could make such straight lines. “This has never been seen before,” said Godoe.

As for the bright-colored, foot-long mystery creature found last month by the submersible, O’Dor said it could be very common in such deep bottom regions, but such areas have rarely been seen by human eyes. In fact, last year’s U.S.-Russia expedition took a picture of something comparable. “Is it the same species? We just don’t know until we can get a sample.”

The answer to that particular mystery will have to await future expeditions. In the meantime, Godoe and his dozens of colleagues around the world have an enormous treasure trove of data to analyze. “We’ve collected enough materials to keep us busy for a great many years,” he said.

An open letter to the wizards of Wall Street from Benoît Mandelbrot, father of the fractal.

By any measure, the late 1990s was a time of extraordinary growth and prosperity in much of the world – and yet, the global financial system still managed to lurch through six crises: Mexico in 1995; Thailand, Indonesia, and South Korea in 1997 and 1998; Russia in 1998; and Brazil from 1998 to 1999. The Indonesian crisis was especially severe: The country’s quarterly real GDP plummeted 18.9 percent, and its currency fell into a hole 526 percent deep. Each of these upheavals spread to most parts of the globe, destabilizing currencies, knocking gaping holes in bank balance sheets and, in many cases, causing a wave of bankruptcies. The fact that each country recovered and the global economy roared on again is testament not to good financial management but to good luck.

Fortunately, bankers and regulators now realize the system is flawed. The world’s central banks have been pushing for more sophisticated risk models – but what they need is one that takes into account long-term dependency, or the tendency of bad news to come in waves. A bank that weathers one crisis may not survive a second or a third. I thus urge the regulators, now drafting the New Basel Capital Accord, to regulate global bank reserves, to encourage the study and adoption of more-realistic risk models. If they do not, the number of crises will just keep growing.

Even the most cursory glance at the economics literature will yield a perplexing cacophony of opinions – and, more invidious, contradictory “facts.” Consider one example. Proposition: Share prices are dependent over (a) a day, (b) a quarter, (c) three years, (d) an infinite span, or (e) none of the above. All these views have been presented as unassailable in countless articles reviewed by countless worthy peers, and supported by countless computer runs, probability tables, and analytical charts. Wassily Leontief, a Harvard economist and 1973 Nobel winner in economic sciences, once observed: “In no field of empirical enquiry has so massive and sophisticated a statistical machinery been used with such indifferent results.”

It is time to change that. As a first step, I issue a challenge to Alan Greenspan, Eliot Spitzer, and William Donaldson – Federal Reserve chair, New York attorney general, and SEC chair, respectively. In the April 2003 settlement of postbubble fraud charges, the biggest Wall Street firms agreed to cough up $432.5 million to fund “independent” research. Spitzer’s office amply documented that what passed for investment research before was not only wrong but fraudulent. Since then, a long line of media and ratings firms have launched independent businesses. But there has been little discussion of what exactly these researchers should research.

I suggest just a small fraction of that sum – say, 5 percent – be set aside for fundamental research in financial markets. Let the vast bulk of the money go where it usually does: ephemeral and contradictory opinions on which stocks to buy, which to sell, and whether to buy or sell at all. But let at least a widow’s mite go to furthering the understanding of how stocks behave in the first place. Let the Wall Street settlement help to fund an international commission for systematic, rigorous, and replicable research into market dynamics. Of course, $20 million is not enough: Even if doctoral students are cheap, proprietary data are not. But with that starting amount and wise leadership, such a commission would quickly draw contributions from others, magnifying its impact.

A well-managed corporation devotes some portion of its research and development budget to basic research, in fields of science that underlie its main business. Isn’t understanding the market as important to the economy as understanding solid-state physics is to IBM? If we can map the human genome, why can’t we map how a man loses his livelihood? If millions can contribute a few cycles of their PCs to the search for a signal from outer space, why can’t they join a coordinated search for patterns in financial markets?

Prices, Probabilities and Predictions



With prediction markets, participants put their money where their mouths are regarding worldwide events ranging from government elections to the outbreak of war. The question is, are these markets more accurate than polls and politicians?



By Sam L. Savage

The second half of the 20th century was devoted to debating the relative merits of planned economies versus free markets. In case you missed it, the winner was announced with the collapse of the former Soviet Union. The power of free markets, in which prices guide the allocation of goods and services, is now almost universally accepted as the best way to generate wealth. Prices are in effect the neurotransmitters of society, reflecting wants, needs, fears, estimates of future supply, outcomes of horse races and so on. Prices are also intertwined with the concept of probabilities, which in turn drive predictions.

My father, Leonard Jimmie Savage, was an early advocate of subjective probability. He encouraged me from a young age to think of the probability of an event as the amount I would pay for a gamble that would pay $100 if the event occurred.

In the information age the relationship between prices and probabilities has grown even more intimate. An elegant essay titled “Nuclear Financial Economics” by Nobel Laureate William Sharpe [1] shows that in some circumstances, the concepts of price and probability are interchangeable. It’s on the Web; don’t miss it. Two types of financial transactions are particularly tied to probabilities and predictions: futures and options.



Futures





Imagine the dismay of a farmer who has slaved away in his corn field for months only to find that when the September harvest arrives, a glut in the market has driven prices to a new low. If he could find someone willing in June to buy 100 bushels of corn for September delivery at a discounted but pre-specified price, the farmer would be protected from corn price risk. But who would buy such a contract? Due to the discount, this “September corn future” is a good deal when averaged over the long run, and if one diversified by also buying wheat, soybean and oat futures, then an unexpected glut in any one of these markets would not be enough to wipe you out. If there are a large number of buyers and sellers in such a market, then the prices of the futures carry a lot of information. For example, a classic 1984 paper by finance professor Richard Roll shows that the futures market in orange juice concentrate is a better predictor of Florida weather than the National Weather Service [2].



Options





The simplest stock option provides you with the right but not the obligation to purchase a certain stock on a certain date at a certain price. Most readers of OR/MS Today are familiar with stock options and the famous Black/Scholes equation for their evaluation. Accordingly, I will provide a “mindle” for grasping the concept of options from a different perspective, that of a glider pilot. [The mindle does for the mind what the handle does for the hand; helps it grasp things.]

In calm air, a glider will descend at a rate of at least 100 feet per minute, regardless of the action of the pilot. In turbulent (volatile) air, the glider will also descend at 100 feet per minute on average if the pilot flies in a straight line. However, if the pilot exercises the option to fly in a circle if he is in an updraft, and exercises the option to fly somewhere else if he is in a downdraft, then the glider can climb at hundreds or even thousands of feet per minute for extended periods. Obviously these options are worthless without metrological volatility, as are stock options without price volatility. Indeed, according to the principle of “implied volatility,” the price of an option in the Wall Street Journal is a surrogate for the volatility of the underlying stock of the corporation.



Prediction Markets





Corn, wheat and Colin Powell. In 1995, while idly searching the Web for stories on Colin Powell, who was considering a run for the Republican presidential nomination, I stumbled upon a link identified as the Colin Powell Nomination Market. Intrigued, I followed it to an electronic futures market run by the University of Iowa [3].

They grow a lot of corn and wheat in Iowa, so I wasn’t surprised to find a futures market there. But Colin Powell? It turned out this was a market where you could trade Powell “Yes” futures, which would pay $1 if Powell accepted the Republican nomination (and zero otherwise), and “No” futures, which would pay $1 if Powell did not accept the Republican nomination (and zero otherwise). How would you start such a market, you might ask. The ingenious Iowa exchange sold these futures in bundles of one “Yes” and one “No.” This was worth exactly $1 because exactly one of these two bets would pay off. But once people owned the futures, they were free to trade them at any price they pleased, and the prices were recorded daily as shown in Figure 1.







Figure 1: Colin Powell nomination market.

Market reaction to such events as the beginning of Powell’s book tour and the O.J. Simpson verdict are clearly visible. Also, notice that the sum of the two prices remains very close to $1. If the sum was ever less than $1, then you would be guaranteed to make money by buying both. If the sum of the prices was ever greater than $1, you would be guaranteed to make money by selling both. The fact that the graph is not completely symmetric indicates that the market is not perfectly efficient, but it seems pretty close. The Iowa market, which is underwritten by the University of Iowa, is still going strong, along with a growing number of others I will describe below.

Societal instability versus corporate volatility. In 1999, I was fortunate to attend a workshop on predicting societal instability organized by U.S. Pacific Command and hosted by the Center for Army Analysis at Fort Belvoir, Va. A number of analytical techniques for predicting societal instability were presented at this fascinating conference. One statistical model, for example, indicated that when the percentage of young unmarried men in a population exceeds a critical threshold, then war is likely. Keep this in mind as you ponder the trend in a certain large country to artificially limit its number of female offspring. I also learned that there is a small country that has been known to sell its women to the large country for use as wives. This forces one to contemplate the uncomfortable trade-off between slave trafficking and war prevention.

On my way home from this eye-opening event, I realized that if you replace the words “societal” with “corporate” and “instability” with “volatility,” you get “corporate volatility,” which, as mentioned earlier, can in effect be read out of the Wall Street Journal as the price of an option. Why wouldn’t prices be able to measure societal instability as well? For example, a sudden drop in wife prices in the importing country described above might imply that things were getting desperate in the exporting country, forcing them to flood the market.

In February 2000, a denial-of-service attack on the online trading firm e-trade caused its stock price to plummet. [A denial-of-service attack is an attack in which hackers arrange for thousands of hits to flood a Web site, rendering it unavailable to the intended visitors.] I wrote to a colleague: “Has it occurred to you that if the hackers had bought puts the day before, they are now millionaires?” [A "put" option pays off if the underlying stock drops in price, while a "call" pays off if it rises.]

I went on to conjecture that, “If you were really lucky, you might discover a twitch in the options market that would actually tip you off to an impending attack.”

Put options on 9/11? Fast forward to Sept. 11, 2001. Unusually high numbers of put options were taken out on American and United Airlines just before the attack, as reported by Dave Carpenter of the Associated Press and others [4, 5 and 6]. To check this out, I created the graph shown in Figure 2 from data available at www.optionsclearing.com [7]. It displays the ratio of put and call trading volumes just before 9/11 for the following stocks: United Airlines (UAL), Southwest Airlines (LUV), Delta Airlines (DAL), American Airlines (AMR) and General Motors (GM). If there is roughly equal trading volume in puts as in calls, one would expect the ratio to be about 1. Thus the value for United Airlines on Thursday, Sept. 6 is 25 times above normal. Notice that there is no trading on weekends, so the spike in AMR puts occurs on the Monday before the Tuesday attack.





Figure 2: Ratio of put and call trading volumes just before 9/11 for the following stocks: United Airlines (UAL), Southwest Airlines (LUV), Delta Airlines (DAL), American Airlines (AMR) and General Motors (GM).

To add to the suspicion, the story persists that a large number of these options were never cashed in.

Could proper interpretation of this data have provided advance warning of the attack? CAUTION: Do not jump to conclusions! There are plenty of explanations that do not involve terrorism. For example, the airlines were in trouble anyway, so plenty of people were betting against them in the fall of 2001. And it is not far-fetched to think that some people would not have cashed in their options, knowing that they would be profiting from a national tragedy. The most authoritative work I am aware of on this subject is “Unusual Options Market Activity with an Application to the Terrorist Attacks of Sept. 11, 2001″ by Allen M. Poteshman of the University of Illinois [8], in which the author states:

“When the option market activity in the days leading up to the terrorist attacks is compared to the benchmark distributions, the volume ratios and call volume indicators are seen to be at typical levels. The indicator of long put volume, however, appears to be unusually high, which is consistent with informed investors having traded in the option market in advance of the attacks.”

To see the full range of explanations of this trading activity, ranging from lucid to lunatic, I suggest Googling “put options airlines terror.”

DARPA gets into and out of the picture. Last July the Department of Defense announced its Policy Analysis Market (PAM) to harness the power of free markets to “focus on the economic, civil and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria and Turkey, and the impact of U.S. involvement with each.” PAM was just preparing to issue prediction instruments whose prices would hopefully shed light on these important foreign policy issues when the entire program was summarily scrapped due to public outrage, forcing the resignation of Defense Advanced Research Projects Agency (DARPA) head John Poindexter [9].







The Policy Analysis Market (PAM) had a short, controversial life before the DoD killed it.

Personally, I thought PAM was a creative idea. My main objections were, first, that such an exchange run by the U.S. Department of Defense could hardly be considered unbiased, and second, why waste taxpayer’s money on something that already existed [10]? At the time there were already several “prediction markets” up and running on the Web, with people putting money where their mouths were on issues as wide-ranging as the outcome of the Kobe Bryant trial to the capture of Osama bin Laden [11, 12 and 13]. Do a Google search on “prediction markets” to learn more.

In an ironic twist, within days of the public announcement of PAM in July 2003, Tradesports.com, a Dublin-based exchange, had floated a wager that would pay $100 if Poindexter still had his job at DARPA as of Aug. 31. [Note, Tradesport contracts are actually for $10, but their graphs are all scaled for $100 or ten contracts. Therefore, to be consistent with their graphs, I have chosen to use $100 for the cost of a single contract within the text.] In the graph of the Poindexter price shown in Figure 3, 30/07 is the European convention for July 30.







Figure 3: Shall he stay or shall he go – The Poindexter price point.

Another one of my favorites on Tradesports was a contract that paid $100 if weapons of mass destruction were found in Iraq by various dates (see Figure 4). At the time of the invasion it was selling for around $70.







Figure 4: Contract price for finding WMD in Iraq.

Graph courtesy of Wolfers, Justin and Eric Zitzewitz (2004), “Prediction Markets,” Journal of Economic Perspectives, Spring 2004.

Eventually one of the WMD futures dropped to zero well before its expiration date, and all trading was subsequently halted in this market. Listening to continued predictions on the evening news that the United States would find WMD in Iraq, while my laptop computer told me otherwise, left me feeling liberated from the traditional media.

From November 2002 to March 2003, William Saletan started a daily column in Slate Magazine called the “Saddameter,” in which he subjectively estimated the odds of war [14].







The “Saddameter” in Slate Magazine subjectively estimated

the odds of war with Iraq.

Justin Wolfers and Eric Zitzewitz of Stanford University, two experts in prediction markets, investigated the Tradesports wager on when Saddam Hussein would be captured. Before the invasion of Iraq, the higher the price, the greater the likelihood of a U.S. invasion. In “What Do Financial Markets Think of War in Iraq?”[15], the authors correlate the Tradesports Saddam prices to the S&P 500 to estimate the penalty that the market was placing on the occurrence of war.



What Works





I recommend two papers for gaining a deeper understanding of prediction markets and when they work. Wolfers and Zitzewitz in the Journal of Economic Perspectives [16] and Spann and Skiera in OR/MS Today [17] provide good introductions to this emerging field. Both papers describe criteria for successful wagers, which I will summarize very loosely here.

1) The terms of the wager must be stated with great specificity so there will be no ambiguity. The Foresight Exchange Bush04 wager [18] on the upcoming election is perhaps a bit over the top in this regard:

“This claim will be TRUE even if elections are postponed or G.W. Bush remains in power by staging a coup. If there are events which make it confusing who the U.S. president is, as of 2005-02-01, this claim is true if G.W. Bush is leading a sovereign government in at least part of the territory of the Unites States of America (as of 2001-01-01) that has recognition of at least one of the U.N. Security Council permanent members (Britain, France, China and Russia) other than the United States.”

2) The participants must have some knowledge of the field. For example, Joe Grundfest of the Stanford Law School has pointed out the futility of a market to predict the veracity of “String Theory” [19]. [String Theory is a yet unproven theory that attempts to unify particle physics (the physics of the very small) with relativity (the physics of the very large.)]

3) The bet must pay off well enough to make it worth investing one’s time and revealing one’s true opinion. This presumes that the main players in the market are more motivated by money than by martyrdom. As a counter example, Grundfest describes how such markets might be manipulated. “Suppose you were a terrorist. If you wanted to blow up a bridge, you would try to get everybody to look every place else by buying the futures that would say, ‘No, what we’re going to do is blow up a power plant.’ ”



Not a Spectator Sport





The easiest way to participate in prediction markets is just to put your money where your mouth is, but for those with some knowledge of economics or operations research, it needn’t stop there.

Iraq futures. A few months ago, I was discussing the situation in Iraq with Michael Schrage of MIT. We both agreed that there was a lot of uncertainty, and that current events were open to contradictory interpretations by politicians and the news media. I suggested that we cook up a market basket of commodities that reflected the well-being of the Iraqis and get it floated on a prediction market. Michael promptly dubbed this the “Baghdad Basket.”

We took the idea to Justin Wolfers, who agreed that this was a prime candidate for a prediction market. However, it quickly became apparent that there was still too much turmoil in Iraq to accurately track commodity prices. Justin discussed the idea of an Iraq Future with Tradesports, who ultimately came up with a security that they believed would trade actively.

The IRAQ.TRANSFER.30JUN, launched on April 6, is a wager that pays $100 “if the current Coalition of Provisional Authority transfers power in Iraq by June 30 at 11:59 p.m. ET.” Otherwise it expires worthless. The price history as of May 5 appears in Figure 5. As of that date, total volume was close to 12,000 trades.







Figure 5: Price history of Iraq futures.

Business Forecasting





Spann and Skiera [17] point out that prediction markets are now being used for forecasts within business organizations where the traders are wagering on such things as “sales, market share, profit, company stock price or time-to-market of new product introductions.”

NewsFutures [12] offers a software platform allowing an organization to run such markets internally. Imagine the creative opportunities within your organization to try this sort of thing. For example, MIT’s Technology Review runs an “Innovation Futures” market powered by NewsFutures, which assesses the fortunes of various technologies from the relative sizes of Windows and Linux server markets to the outcome of technology-related law suits.

If my father were still living, he would be fascinated by the attempt to harness subjective probability as an economic force. But will prediction markets work? I suggest that we float a wager that will pay $100 if the consensus in five years is that they do, and pays zero otherwise.

© 2004, Sam L. Savage

References

1. Sharpe, William F., “Nuclear Financial Economics,” http://gobi.stanford.edu/researchpapers/detail1.asp?Document_ID=734
2. Roll, Richard, 1984, “Orange Juice and Weather,” American Economic Review, Vol. 74, No. 5, pp. 861-80, American Economic Association.
3. 3. Iowa Electronic Market, http://www.biz.uiowa.edu/iem/
4. Carpenter, Dave, “Option Exchange Probing Reports of Unusual Trading Before Attacks,” Associated Press, Sept. 18, 2001. See http://cjonline.com/stories/091901/ter_tradingacts.shtml
5. Schoolman, Judith, “Probe of Wild Market Swings in Terror-Tied Stocks,” [New York] Daily News, Sept. 20, 2001, p. 6.
6. Toedtman, James and Charles Zehren, “Profiting from Terror?” Newsday, Sept. 19, 2001, p. W39.
7. 7. http://www.optionsclearing.com/
8. Poteshman, Allen M., “Unusual Options Market Activity with an Application to the Terrorist Attacks of Sept. 11, 2001,” University of Illinois at Urbana-Champaign, Department of Finance, 2002, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=370741
9. Wolfers, Justin and Zitzewitz, Eric, “The Furor Over Terrorism Futures,” Washington Post, July 31, 2003, p. A19.
10. Schrage, Michael and Savage, Sam, “If This Is Harebrained, Bet on the Hare,” Washington Post, Aug. 3, 2003, Page B04, www.washingtonpost.com/wp-dyn/articles/A14094-2003Aug2.html. Sidebar: www.washingtonpost.com/wp-dyn/articles/A14095-2003Aug2.html
11. http://www.tradesports.com/
12. http://us.newsfutures.com
13. http://www.ideosphere.com/fx/
14. Saletan, William, “Saddameter,” http://slate.msn.com/id/2074152
15. Leigh, Andrew, Wolfers, Justin and Zitzewitz, Eric, “What Do Financial Markets Think of War in Iraq?” NBER Working Paper 9587, March 2003. www.nber.org/papers/w9587
16. Wolfers, Justin and Zitzewitz, Eric, “Prediction Markets,” Journal of Economic Perspectives, Vol. 18, No. 2, Spring 2004.
17. Spann, Martin and Skiera, Bernd, “Taking Stock of Virtual Markets,” OR/MS Today, October 2003, Vol. 30, No. 5, www.lionhrtpub.com/orms/orms-10-03/frfutures.html
18. Foresight Exchange, Bush04, www.ideosphere.com/fx-bin/Claim?claim=Bush04
19. Grundfest, Joseph, “Business Law,” Stanford Magazine, November 2003, www.stanfordalumni.org/news/magazine/2003/novdec/farm/news/bizlaw.html

Sam Savage is a consulting professor of Management Science & Engineering at Stanford University.

The virtue of idleness

From the Bible on, moralists and nags have promoted the benefits of hard work and early rising. They are mistaken, argues Tom Hodgkinson. For breathing space to create and time to reflect, indolence is essential. He offers a guide to easy living, pleasurable illness, and effortless sex

Saturday August 7, 2004

The Guardian

I wonder if that hard-working American rationalist and agent of industry Benjamin Franklin knew how much misery he would cause in the world when, back in 1757, high on puritanical zeal, he popularised and promoted the trite and patently untrue aphorism “early to bed and early to rise makes a man healthy, wealthy and wise”?

It is a sad fact that from early childhood we are tyrannised by the moral myth that it is right, proper and good to leap out of bed the moment we wake in order to set about some useful work as quickly and cheerfully as possible. Parents begin the brainwashing process and then school works yet harder to indoctrinate its charges with the necessity of early rising. My own personal guilt about feeling physically incapable of rising early in the morning continued well into my 20s.

As a student, I developed complex alarm systems. I bought a timer plug and set it to turn on my coffee maker and also the record player, on which I had placed my loudest record, It’s Alive by the Ramones. 7.50am was the allotted time. Being a live recording, the first track was prefaced by crowd noise. The cheering and whooping would wake me, and I’d know I had only a few seconds to leap out of bed and turn down the volume before Dee Dee Ramone would grunt “One – two – three – four” and my housemates and I would be assaulted by the opening chords of Rockaway Beach, turned up to 11. The idea was that I would then drink the coffee and jolt my body into wakefulness. It half worked. When I heard the crowd noise, I would leap out of bed and totter for a moment. But what happened then, of course, was that I would turn the volume right down, ignore the coffee and climb back to the snuggly, warm embrace of my duvet. Then I’d slowly come to my senses at around 10.30am, doze until noon, and finally stagger to my feet in a fit of self-loathing.

For all modern society’s promises of leisure, liberty and doing what you want, most of us are still slaves to a schedule we did not choose. Why have things come to such a pass? Well, the forces of the anti-idle have been at work since the fall of man. The propaganda against oversleeping goes back a very long way, more than 2,000 years, to the Bible. Here is Proverbs, chapter 6, on the subject:

Go to the ant, thou sluggard; consider her ways, and be wise:

Which having no guide, overseer, or ruler,

Provideth her meat in the summer, and gathereth her food in the harvest.

(I would question the sanity of a religion that holds up the ant as an example of how to live. The ant system is an exploitative aristocracy based on the unthinking toil of millions of workers and the complete inactivity of a single queen and a handful of drones.)

Christianity has promoted bed-guilt ever since. This passage from the Bible is used as a bludgeon by moralists, capitalists and bureaucrats in order to impose upon the people the notion that God hates it when you get up late. It suits the lust for order that characterises the non-idler.

In mid-18th-century London, Dr Johnson, who had nothing to be ashamed of as far as literary output goes, is to be found lacerating himself for his sluggardly habits. “O Lord, enable me … in redeeming the time I have spent in Sloth,” he wrote in his journals at the age of 29. Twenty years later, things haven’t improved, and he resolves “to rise early. Not later than six if I can.” The following year, having failed to rise at six, he adapts his resolution: “I purpose to rise at eight because though I shall not yet rise early it will be much earlier than I now rise, for I often lye till two.”

The Methodist John Wesley, who himself rose every morning at 4am, wrote a sermon called The Duty And Advantage of Early Rising (1786), in which he claimed that lying in bed was physically unhealthy, and used comically quasi-scientific terms to drive home his argument: “By soaking so long between warm sheets, the flesh is as it were parboiled, and becomes soft and flabby. The nerves, in the meantime, are quite unstrung.”

The bestselling Victorian author Samuel Smiles’s books were titled Self-Help (1859), Thrift (1875) and Duty (1880), and were packed with homilies. If we think we are free of this sort of thing today, then look at our magazines and the “sort your life out” features that proliferate. Patronising self-help books regale us with various bullet-pointed strategies to becoming more productive, less drunk and more hard-working. Many involve spending a lot of money.

I would argue not only that early rising is totally unnatural but also that lying in bed half awake – sleep researchers call this state “hypnagogic” – is positively beneficial to health and happiness. A good morning doze of half an hour or more can, for example, help you to prepare mentally for the problems and tasks ahead.

As to how on earth going early to bed could automatically guarantee riches and happiness, I suppose nothing can be proved, but I’m with Dr Johnson who confidently asserted: “Whoever thinks of going to bed before 12 o’clock is a scoundrel.”

Greatness and late rising are natural bedfellows. Late rising is for the independent of mind, the individual who refuses to become a slave to work, money, ambition. In his youth, the great poet of loafing, Walt Whitman, would arrive at the offices of the newspaper where he worked at around 11.30am, and leave at 12.30 for a two-hour lunch break. Another hour’s work after lunch and then it was time to hit the town.

The English historian EP Thompson, in his classic book The Making Of The English Working Class (1963), argues that the creation of the job is a relatively recent phenomenon, born out of the Industrial Revolution. Before the advent of steam-powered machines and factories in the mid-18th century, work was a much more haphazard affair. People worked, yes, they did “jobs”, but the idea of being yoked to one particular employer to the exclusion of all other money-making activity was unknown.

Take the weavers. Before the invention in 1764 of the spinning jenny by the weaver and carpenter James Hargreaves, and of the steam engine in the same year by James Watt, weavers were generally self-employed and worked as and when they chose. The young Friedrich Engels noted that they had control over their own time: “So it was that the weaver was usually in a position to lay by something, and rent a little piece of land, that he cultivated in his leisure hours, of which he had as many as he chose to take, since he could weave whenever and as long as he pleased,” he wrote in his 1845 study The Condition Of The Working Class In England. “They did not need to overwork; they did no more than they chose to do, and yet earned what they needed.”

Thompson writes: “The work pattern was one of alternate bouts of intense labour and of idleness.” A weaver, for example, might weave eight or nine yards on a rainy day. On other days, a contemporary diary tells us, he might weave just two yards before he did “sundry jobs about the lathe and in the yard & wrote a letter in the evening”. Or he might go cherry-picking, work on a community dam, calve the cow, cut down trees or go to watch a public hanging. Thompson adds as an aside: “The pattern persists among some self-employed – artists, writers, small farmers, and perhaps also with students [idlers, all] – today, and provokes the question of whether it is not a ‘natural’ human work-rhythm.”

England, then, before the invention of the dark satanic mills, was a nation of idlers. But in time the new Protestant work ethic was successful. The Industrial Revolution, above all, was a battle between hard work and laziness, and hard work won.

The thundering polemicist Thomas Carlyle did much damage in the 19th century by promoting the notion of the dignity or even the romance of hard graft. “Man was created to work, not to speculate, or feel, or dream,” he wrote, adding, “Every idle moment is treason.” It is your patriotic duty to work hard – another myth, particularly convenient to the rich who, as Bertrand Russell said, “preach the dignity of labour, while taking care themselves to remain undignified in this respect”. Or as the late, great British writer Jeffrey Bernard put it: “As if there was something romantic and glamorous about hard work … if there was something romantic about it, the Duke of Westminster would be digging his own fucking garden, wouldn’t he?”

If you want religious justification for your refractory habits, then remember there are parts of the Bible – unlike those so often quoted by pro-work propagandists – that argue against toil. Work is a curse, caused not by God but by the serpent in the Garden of Eden. He led Adam and Eve to fall from the work-free state of paradise by awakening material desire in them, thereby condemning them to toil and pain. If you want nothing, you don’t need to work.

God himself set a good example, argues Paul Lafargue, the socialist campaigner and son-in-law of Karl Marx, in The Right To Be Lazy: after working for six days, he rests for all eternity.

The lie-in – by which I mean lying in bed awake – is not a selfish indulgence but an essential tool for any student of the art of living. As Sherlock Holmes knew. Lolling around in his smoking jacket, puffing his pipe, Holmes would sit and ponder for hours on a tricky case. In one superb story, the opium-drenched The Man With The Twisted Lip, Holmes solves yet another case with ease. An incredulous Mr Plod character muses: “I wish I knew how you reach your results,” to which Holmes replies: “I reached this one by sitting upon five pillows and consuming an ounce of shag.”

René Descartes, in the 17th century, was similarly addicted to inactivity. Indeed, it was absolutely at the centre of his philosophy. When young and studying with the Jesuits, he was unable to get up in the morning. They would throw buckets of cold water over him and he would turn over and go back to sleep. Then, because of his obvious genius, he was granted the special privilege of getting up late. This was his modus operandi because, of course, when he was lying in bed he was thinking. It is easy to see how someone so inactive should conclude that the body and the mind are separate entities. Laziness produced Cartesian duality. For him, lying in bed and thinking was the very essence of being human: Cogito, ergo sum, or, in other words, I lie in bed thinking, therefore I am.

Idleness as a waste of time is a damaging notion put about by its spiritually vacant enemies. Introspection could lead to that terrible thing: a vision of the truth, a clear image of the horror of our fractured, dissonant world. The writer Will Self, arguing that long periods of motorway driving can be a method of recapturing lost idling time, puts it like this: “This cultural taboo against thinking … exists in England because of the Protestant work ethic which demands that people shouldn’t be idle – ergo they shouldn’t think.”

This prejudice is well established in the western world. Governments do not like the idle. The idle worry them. They do not manufacture useless objects nor consume the useless products of labour. They cannot be monitored. They are out of control.

That being ill can be a delightful way to recapture lost idling time is a fact well known to all young children. On schooldays, the independent child soon learns that if he is ill, then he can lie in bed all day, avoid work and be looked after. What a different world from the everyday one of punishments, recriminations and duties. Suddenly everyone is very nice to you.

Being ill – nothing life-threatening, of course – should be welcomed as a pleasure in adult life, too, as a holiday from responsibility and burden. Indeed, it may be one of the few legitimate ways left to be idle. When ill, you can avoid those irksome tasks that make living such hard work.Dressing, for instance. You can pad around the house in your dressing gown like Sherlock Holmes, Noël Coward or our friend, that hero of laziness, Oblomov. When ill, you are the master. You do what you like. You can play your old Clash albums. Stare out of the window. Laugh inwardly at the sufferings of your co-workers. Looking a little deeper at the benefits of being ill, we may argue that the physical pain can lead to positive character development, that bodily suffering can improve the mind. “That which does not kill me makes me stronger,” said Nietzsche.

The intellectual benefits of being ill are demonstrated and reflected upon at length by Marcel Proust. Famously chronically ill and frequently bed-bound, he had plenty of time to theorise on being ill: “Infirmity alone makes us notice and learn, and enables us to analyse processes which we would otherwise know nothing about. A man who falls straight into bed every night, and ceases to live until the moment when he wakes and rises, will surely never dream of making, not necessarily great discoveries, but even minor observations about sleep.”

Proust was accused by contemporaries of being a hypochondriac, which may have been true. But how else would he have found the time to write the hundreds of thousands of words that make up À la Recherche du temps perdu? And how else would we find the time to read it, were we not sometimes ill? If Proust had been a healthy, upstanding member of society, then he might have suffered a successful career in the upper reaches of the civil service, and the world of letters would have been a good deal poorer.

In the far-off days before painkillers and tranquillisers, illness and trauma were not to be swept under the carpet and ignored. They were to be respected, listened to and given time to work themselves out. When Samuel Pepys had an immensely painful operation to remove a kidney stone, he did not rush back into the office 36 hours later. No. He had the right to a full 40 days’ recovery period during which time he was not allowed to do anything.

“Convalescing” is a word one doesn’t hear much these days. It’s as if we have banished the notion that time is a healer. What happened, I wonder, to the doctors of the turn of the century, who used to recommend long periods of inactivity on the South Coast for minor ailments? When the sickly velvet-coated dandy Robert Louis Stevenson fell ill in 1873, aged 23, the diagnosis was “nervous exhaustion with a threatening of phthisis” and the prescription was a winter on the Riviera, “in complete freedom from anxiety or worry”. Once upon a time, we knew how to be ill. Now we have lost the art. Everyone, everywhere, disapproves of being ill.

To demonstrate how our attitudes to illness have grown dramatically less idler-friendly in recent years, we need only look at the recent history of Lemsip’s marketing. When I was a child, a mug of Lemsip mixed with honey was one of the pleasures of lying in bed with a heavy cold. It went with being wrapped in a dressing gown and watching Crown Court. It was all part of the fun. Your mother might bring you a steaming cup of the soothing nectar in bed. You would sip it, cough weakly and luxuriate in its fumes. It had some positive effect on the physical symptoms of the illness, to be sure, but it was also a pleasure in itself. Lemsip was part of the delicious and much-needed slow-down that illness can bring into our life.

Not any more. Lemsip has reinvented itself as a “hard-working medicine”. It has changed from a friend of the idler to his worst enemy. The implication now is that rather than enjoying your illness and waiting a few days till it has gone away, you should manfully repress the symptoms and carry on as normal, competing, working, consuming. Most appalling of all was their recent ad line, “Stop Snivelling and Get Back to Work”.

“Staying in is the new going out” was a joke I made at a meeting once. Though daft and glib, there remains some truth in it. Going out all the time can be oppressive. It’s hard work. Trying to keep up with the latest bar, club, movie, gallery, show or band is a full-time occupation, and one always feels as if there is something better going on somewhere else. On a simple level, of course, staying in is the idler’s dream, because of the low physical effort involved. It avoids the tedious and costly business of getting ready, leaving the house, travelling somewhere else, attending the function and then enduring the still more tedious and costly business of getting home at the end of it all. In any case, planned schemes of merriment, as Dr Johnson rightly pointed out, rarely turn into the best evenings.

The greatest piece of staying-in literature ever composed is À Rebours by JK Huysmans, published in 1884. Huysmans was a decadent fin de siècle writer with a bourgeois day job – he was a clerk at the Ministry of Interior for 30 years. But at night he allowed his literary imagination to roam free and created some of the most fascinating works of the period. À Rebours, which translates as Against Nature, is a study of a wealthy dandy called Des Esseintes. Having exhausted the pleasures of town and failed to find the meaning of life in weird sex and late nights, he decides to retreat to a hillside mansion and create his own artificial reality, a peculiar paradise of colour, smell and beauty, controlled by ingenious mechanical devices. He is motivated by an idleness of the body and a snobbishness of the mind. He doesn’t want to exert himself; he doesn’t want to consort with his fellow human beings, whom he regards as irredeemably vulgar. Bothering itself, to Des Esseintes, is vulgar. With inner resources and books, there is no need to move about, to travel.

So, Husymans sets about creating his indoor wonderland. Helped by a couple of bemused servants, he uses his considerable wealth and imagination to build an absurdly extravagant reality. His first act is to sleep during the day and come alive at night. Perhaps the best known of Des Esseintes’s innovations is the golden tortoise. He has a fancy that it would be amusing to have in his sitting room an ornament that moved around, so orders a tortoise to be plated with gold and encrusted with jewels. Another caprice is an invention he calls the “mouth organ”, a complex machine that delivers drops of various different liqueurs from an array of stops, the idea being to mix them up on the palate and create a symphony of flavour. He also orders the most fragile, delicate and overbred hothouse flowers to festoon his house. There is a nice vein of dark humour that undercuts the earnest descriptions of Des Esseintes’s experiments: the tortoise, he notices one evening, has died, and after a lengthy description of the mouth organ, Des Esseintes finds that he can’t be bothered to go through the whole palaver and simply helps himself to a shot of whisky before sitting down. Needless to say, the flowers all die, too.

Eventually, Des Esseintes is defeated by the botherers. His style of living makes him ill, and he is told by various doctors that he must move back to Paris and get out there, have fun and talk to people. Otherwise, “insanity quickly followed by tuberculosis” will be his fate. Des Esseintes gives in to their advice with bad grace. His project may have been a failure, but that doesn’t mean we shouldn’t take inspiration from his heroic attempt to elevate his soul via interior furnishings.

I have been inspired to create a pub in my own home. For me, the pleasures of staying in revolve around drinking and talking. So I took the unprepossessing scullery in our rented Devon farmhouse and installed a dartboard and two old dining-room chairs, which cost £7 each in a local bric-a-brac place. I’ve also added a print of dogs playing pool, fairy lights, a piece of driftwood, a shove-ha’penny board, beer mats, Hogarth prints, an old scythe which I found on a rubbish tip and postcards of Cornish men eating giant pasties. All these items were either found lying around or were donated by friends. The pub is called The Green Man and my friend Pete Loveday has painted the sign. Through the battered casement windows you can see the sun set over the sea, and without stirring abroad I can know the whole world.

I have moved my old Dansette record player into my home-pub and we play Noël Coward and The Ink Spots on sunny afternoons. I find that sort of music accompanies ale and cigarettes rather well.

According to the actor David Garrick, when Dr Johnson was asked what were the greatest pleasures in life, he “answered fucking and the second was drinking. And therefore he wondered why there were not more drunkards, for all could drink tho’ all could not fuck.”

From Burns to Byron and from Bohemians to hippies, the history of riotous, easy living and the quest for liberty has been bound up with the pursuit of sexual freedoms. And the pleasures of sex have long been attacked by the prudes and bureaucrats who tend to run countries and large institutions. Solo pleasuring has been a particular victim. In common with other forms of non-reproductive sex such as homosexuality or bestiality, the 19th century saw a widespread and concerted attack on masturbation from priests, schoolteachers, doctors and scientists.

You can imagine the burden everyone must have been carrying around with them as a result. Here is an extract from the guilt-torn diary of a certain Victorian do-gooder, written in 1850:

March 15: God has delivered me from the greatest offence and the constant murder of all my thoughts.

March 21: Undisturbed by my great enemy.

June 7: But this long moral death, this failure of all attempts to cure. I think I have never been so bad as this last week.

June 17: After a sleepless night physically and morally ill and broken down, a slave – glad to leave Athens. I have no wish on earth but sleep.

June 18: I had no wish, no enemy, I longed but for sleep. My enemy is too strong for me, everything has been tried. All, all is vain.

June 21: My enemy let me go and I was free.

June 24: Here too I was free.

June 29: Four long days of absolute slavery.

June 30: I cannot write a letter, can do nothing.

July 1: I lay in bed and called on God to save me.

(You may be surprised to learn the owner of this towering libido was none other than Florence Nightingale.)

In the modern west we like to congratulate ourselves on having a more open-minded attitude to sex. But sex, like so many other pleasures, has been caught up in the striving ethic. It has become hard work; something we have to “perform” at; a competitive sport. The journalist Suzanne Moore made this point in the Idler in 1995. She recalled her schoolfriend Janice, who taught the young Suzanne various sexual tricks: “What Janice tried to impress on me was that sex was an activity that you had to work at, practise, evolve techniques for: one vast exercise in self-improvement. I had never liked sports of any description. I was lazy. I couldn’t be bothered …” This vast effort is all wrong. Sex becomes something we have to learn. The magazines give us homework. And if we get it wrong, if we get low marks, then we feel guilty and useless. Fitness-freak pop stars such as Geri Halliwell contribute to this sort of suffering, as does Madonna, who, as Moore says, “is of course living proof that you can try too hard. She has made sex as sexy as aerobics and, like step classes, something that has to be slotted into an already tight schedule.”

It seems to me the situation is critical in the US, where sex has been elevated into a cross between a religion and a sport. And spare us, please, the humourless tantric-sex workouts of Sting. But the question remains: what is idle sex? With what shall we substitute the modern ideal of athletic power-shagging? Well, Suzanne has one answer: “To be frank, I have never understood what was so wrong with lying back and thinking of England … when sex becomes such major toil, a labour of love, let me tell you that it is your revolutionary duty to phone in sick.”

Oh, to lie back and be used and abused! This is surely the secret wish of the sexual slacker. Sex for idlers should be messy, drunken, bawdy, lazy. It should be wicked, wanton and lewd, dirty to the point where it is embarrassing to look at one another in the morning. And idle sex should be languid. Men are characterised as wanting to get straight to the point when it comes to intercourse, and women complain that all men want to do is thrust it in. But in my own case, I find I have a slight sense of disappointment when the messing around comes to an end and the final act begins. It means the mechanical element has taken over, the useful bit, the part that actually makes babies. A part of me would like simply to toy with my mistress for days on end under the lotus tree or on an enormous pile of velvet cushions, while smoking, drinking and laughing.

People criticise drunken sex but in my experience it tends to be better than sober sex. Drink and drugs improve sex by removing all the performance anxiety and guilt and concern about having a crap body, as well as certain, ahem, inhibitions.

Dreams and idleness go together and are dismissed as “the children of an idle brain”, as the sensible and grounded Mercutio says to the starry-eyed Romeo in Romeo And Juliet. Dreamers are “away with the fairies”. They are told to start living in the “the real world”. The trick, indeed the duty, of every serious idler is to harmonise dreamworld and dayworld.

Dreams make the world go round. Our dreams at night fill our subconscious with strange reflections of the day. In our dreams, our spirit roams free; we can fly, we can sing, we are good at things (I have dreams where I am brilliant at skateboarding, for example), we have erotic encounters with celebrities.

For surrealist filmmaker Luis Buñuel, dreams were the highlight of his life: “If someone were to tell me I had 20 years left, and ask me how I’d like to spend them, I’d reply: ‘Give me two hours a day of activity, and I’ll take the other 22 in dreams … provided I can remember them.’ I love dreams, even when they’re nightmares, which is usually the case.”

The two hours a day, presumably, were when Buñuel would fashion some sort of art from his visions.

There are many examples of the creative power of dreams: Kubla Khan came to Coleridge in a dream, as did the tune for Yesterday to Paul McCartney. The idea for Frankenstein revealed itself to the young Mary Shelley in a waking dream; Einstein said that a breakthrough in his theory of relativity had come to him in a dream; Descartes had a dream that set him on the path towards his whole philosophical system (he said it was “the most important affair” of his life). JK Rowling was staring out of the window on a train when the idea, plot and characters for Harry Potter came to her.

The art of living is the art of bringing dreams and reality together. I have a dream. It is called love, anarchy, freedom. It is called being idle

Tom Hodgkinson, 2004.

Sherlock Holmes and Dr. Watson go on a camping trip, set up their tent, and fall asleep. Some hours later, Holmes wakes his faithful friend.

“Watson, look up at the sky and tell me what you see.”

Watson replies, “I see millions of stars.”

“What does that tell you?”

Watson ponders for a minute. “Astronomically speaking, it tells me that there are millions of galaxies and potentially billions of planets. Astrologically, it tells me that Saturn is in Leo. Timewise, it appears to be approximately a quarter past three. Theologically, it’s evident the Lord is all-powerful and we are small and insignificant. Meteorologically, it seems we will have a beautiful day tomorrow. What does it tell you?”

Holmes is silent for a moment, then speaks. “Watson, you idiot, someone has stolen our tent.”